Analyst Note
| Angus Hewitt, CFA |We maintain our AUD 12 fair value estimate for shares in no-moat GUD Holdings following a trading update. Despite reaffirming previous earnings guidance at the April investor day, performance in GUD's new vehicle-exposed businesses have worsened in recent weeks, leading management to cut underlying fiscal 2022 EBITA guidance to AUD 147 million. Given fiscal 2022 is practically finished, we lower our EBITA forecast to AUD 147 million, from AUD 164 million previously. We anticipate headwinds to persist into fiscal 2023, and lower our underlying EBITA forecast by 6% to AUD 210 million. But we do not anticipate headwinds to prove protracted, and our longer-term forecasts are largely intact. At current prices, shares in GUD appear undervalued.